"At this point, I've been not working for a year and a half," he said. "I have a choice, which is sell part of my art collection, which when I first left my job in 2007 was an option because the art market was strong, but like all markets it has gone south. Now I can take a loan without having to sell at a discount."
For her $5 million loan, Ms. Leibovitz put up as collateral a country house in Rhinebeck, N.Y., three town houses in Greenwich Village and all "copyrights ... photographic negatives ... contract rights" existing or to be created in the future, according to a loan document filed with the City Register's Office in December. That month, Art Capital granted her an additional $10.5 million loan, which was to consolidate the existing mortgages on her homes, according to loan documents.
Ms. Leibovitz appears to have experienced financial challenges in recent years, facing a lengthy, costly and litigious renovation on the three adjoining town houses, federal and state tax liens of more than $1.4 million -- which appear to have been paid back -- and lawsuits from a lighting company and a stylist she had hired, asking for a total of more than $700,000.
Ms. Leibovitz, one of the most successful editorial and commercial photographers in the business, declined to comment on the reasons for the loans. In a brief e-mail message, she said her financial health was "fine."
Robert Pledge, the founder of Contact Press Images, which represents Ms. Leibovitz's editorial work, said she had faced many stresses in the last eight years, including runaway expenses at her Chelsea studio, which she has since closed; the renovations; the deaths of her lover Susan Sontag and her parents; and the birth of three children.
The Warhols hanging at Art Capital, one an acrylic and silkscreen image of a hamburger called "Hamburger," the other called "Mineola Motorcycle," once hung in the collection of Evan Tawil, a manufacturer of children's clothing. Mr. Tawil said he had seen a small advertisement for Art Capital posted outside the Madison Avenue entrance of the Carlyle hotel ("Private Banking for the Art World") and thought he could leverage his collection to buy more art.
"I knew I had money coming in," said Mr. Tawil, who said he borrowed about $250,000 from Art Capital in 2007. "I had receivables, but the buys I wanted to make were time-sensitive."
Mr. Tawil's lawyer, John Cahill, said that when Mr. Tawil's loan term ended with his having made his interest payments in a timely fashion, he asked if Art Capital would release his paintings so he could auction them to pay off the principal, but the company refused.
The Rubens once belonged to Veronica Hearst, the widow of Randolph Apperson Hearst. As detailed in an article in Vanity Fair in December, Ms. Hearst had mortgaged her artworks in an effort to hold on to a 52-room mansion in Manalapan, Fla., which she eventually lost in foreclosure.
Mr. Schnabel, the artist and film director, turned to Art Capital for an $8 million loan in 2006, when he was constructing Palazzo Chupi, an ornate apartment project on West 11th Street. He used only the real estate and not his own art collection as collateral. (To pay down that debt, Mr. Schnabel later took out a loan with Commerce Bank, for which he did pledge his personal art collection, documents filed with New York State show.)
Mr. Schnabel is now suing Art Capital, claiming that he paid back his loan in a timely fashion but that Art Capital tried to add exorbitant fees. Art Capital counterclaims that it is entitled to millions of dollars in additional interest and fees because Mr. Schnabel did not reveal there was an existing mortgage on the property.
Citing client confidentiality, Art Capital declined to discuss specific loans, but Baird Ryan, a co-owner, explained that because his firm understands the art market better than regular banks, artists can make attractive borrowers. "We say, 'Hey, you're a bankable asset,' " Mr. Ryan said. "So we encumber their own art."
None of the legal messiness is surprising given the nature of the business, said Gerald Peters, an art dealer in Santa Fe, N.M., who said he had bought paintings from Art Capital. "The game they have to play is rough," he said. "But the service they are providing is real, and there's demand for it."
Mr. Peck said the vast majority of Art Capital's customers repaid their loans and were satisfied with the company's services.